The Rural Nonfarm Sector and Livelihood Strategies in Sri Lanka : Background Report to Sri Lanka Poverty Assessment
Sri Lanka’s economy underwent steady structural transformation over the last two decades. During this time, economic activities increasingly shifted toward industry and services. Poverty fell significantly during this period, mainly led by nonfarm...
| Format: | Report |
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| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/undefined/210021634313271639/The-Rural-Nonfarm-Sector-and-Livelihood-Strategies-in-Sri-Lanka-Background-Report-to-Sri-Lanka-Poverty-Assessment http://hdl.handle.net/10986/36513 |
| Summary: | Sri Lanka’s economy underwent steady
structural transformation over the last two decades. During
this time, economic activities increasingly shifted toward
industry and services. Poverty fell significantly during
this period, mainly led by nonfarm income growth. The nature
of rural nonfarm activities is quite heterogeneous and
nonfarm activities can entail low-return activities.
Understanding the nature of the rural nonfarm economy is a
first step towards assessing its potential to facilitate
economic transformation and where policy interventions could
be useful. The main findings are two-fold. First, there has
been a clear shift from farm to nonfarm activities over the
last decade, and livelihoods sources vary significantly
across the income distribution. For example, poor households
are much more likely to be engaged in farm activities or
wage employment in industries, whereas rich households have
a higher likelihood of working in services. While both farm
and nonfarm activities are vital to support rural
livelihoods, it is the nonfarm sector that engages the
majority of rural workers. Second, better education is
strongly associated with higher participation and payoff
from nonfarm activities. Interestingly, education does not
seem to influence the choice between engaging in farm and
unskilled nonfarm employment, highlighting a possible skills
barrier to moving to better-paying nonfarm jobs. |
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